State v. Testa

Decided: April 17, 1991.

STATE OF NEW JERSEY, BY THE COMMISSIONER OF TRANSPORTATION, PLAINTIFF-APPELLANT,v.AUGUSTINE TESTA AND DOROTHY B. TESTA, DEFENDANTS-RESPONDENTS, AND NEW JERSEY NATIONAL BANK, A NATIONAL BANKING ASSOCIATION; COMMERCE BANK, N.A., A NATIONAL BANKING ASSOCIATION; FRANK DEMURO, D/B/A PRINCETON TELE COMMUNICATIONS; JOHN PETZITELLO, D/B/A BIG JOHN'S RESTAURANT; STATE OF NEW JERSEY; TOWNSHIP OF CHERRY HILL, IN THE COUNTY OF CAMDEN, A MUNICIPAL CORPORATION OF NEW JERSEY, DEFENDANTS

On appeal from the Superior Court of New Jersey, Law Division, Camden County.

Gaulkin, Shebell and Skillman. The opinion of the court was delivered by Shebell, J.A.D.

This appeal raises anew the issue of the extent of disclosure required by N.J.S.A. 20:3-6, which directs that the condemning authority, prior to instituting an action to condemn, engage in bona fide negotiations with the property owner, including "an offer in writing . . . setting forth . . . the compensation offered to be paid and a reasonable disclosure of the manner in which the amount of such offered compensation has been calculated. . . ." (Emphasis added). The State maintains that " N.J.S.A. 20:3-6 does not require disclosure during prelitigation negotiations of appraisal reports which are not approved by a condemnor nor relied upon in arriving at the offer of compensation."

The State urges that we reject the holding of the Law Division in State, by the Comm'r of Transp. v. D'Onofrio, 235 N.J. Super. 348, 562 A.2d 267 (Law Div.1989), from which the State did not then appeal. D'Onofrio held that the reasonable disclosure aspect of bona fide negotiations under N.J.S.A. 20:3-6 requires a condemnor to provide a prospective condemnee with all appraisals obtained as part of the process in making its offer to purchase the property. Id. at 355, 562 A.2d 267. The State asserts that it did not appeal from the D'Onofrio decision because the condemnee did not seek dismissal and the State needed immediate possession of the property in order to proceed with a multimillion dollar highway improvement project.

In the present case, the Department of Transportation (Department), prior to filing its complaint in condemnation, retained two appraisers to determine the value of the .592 acre parcel to be taken and to assess any damages to the remainder of the property. The Department acknowledges that it "subsequently received appraisals from both men and approved the appraisal of John Borden as its estimate of just compensation." The Department negotiators then met with the property owners and presented them with a copy of the Borden appraisal plus an offer equal to that appraised value of the taking and damages in the amount of $511,000.

Negotiations were not successful; therefore, a complaint in condemnation was filed. An order to show cause for possession and appointment of commissioners was issued; however, the property owners obtained an adjournment of the return date and moved to dismiss the State's complaint on the ground, among others, that the State did not engage in bona fide negotiations pursuant to N.J.S.A. 20:3-6 in that it failed to provide the owners with a copy of the appraisal report of Harry Renwick, an appraisal upon which the State contends it did not base its offer of compensation.

The Law Division judge, by order of July 5, 1990, directed the State to provide the property owner with the Renwick appraisal within twenty days or face dismissal of the condemnation complaint. On August 1, 1990, the property owners supplied an affidavit verifying that the State had not supplied a copy of the appraisal; whereupon, the court entered an order dismissing the State's complaint. We affirm.

In this appeal the State raises no meaningful arguments that were not previously presented to the Law Division in D'Onofrio, 235 N.J. Super. at 348, 562 A.2d 267. Judge Serpentelli, in D'Onofrio, fully explored the various arguments pro and con on this issue in light of the relevant statutory authority and case law. He appropriately and articulately disposed of the State's arguments against disclosure and concluded "that the

reasonable disclosure aspect of bona fide negotiations requires the condemnor to provide the prospective condemnee with all appraisals in its possession which have been obtained for the purposes of making its condemnation offer." Id. at 355, 562 A.2d 267.

We are persuaded that fair dealing by the State requires disclosure of all appraisals of the subject property undertaken pursuant to the Eminent Domain Act, N.J.S.A. 20:1-1 to -36. Significantly, the Act requires notice of appraisals and provides that "the owners shall be given an opportunity to accompany the appraiser during inspection of the property." N.J.S.A. 20:3-6. It would ill-serve the appearance of fair dealing if the landowners were then told they could not have pre-negotiation access to the report of an appraiser that they had accompanied on an inspection of their property.

The Legislature has expressly mandated that the condemnor undertake bona fide negotiations with the property owner and that the State's offer may not be less than its "approved appraisal." Id. We are satisfied it intended that the State's offer reflect the State's good faith estimate of the full fair market value of the taking. See N.J.S.A. 20:3-6; R. 4:73-1. Thus, we are convinced that the statutory mandate of "reasonable disclosure of the manner in which the amount of such offered compensation has been calculated" logically includes turnover of all appraisals as we are unable to perceive how the State's calculation of the compensation to be offered ...

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